Jan302017

“The Davis-Bacon Act is an 80-year-old wage subsidy law that requires all federally funded projects worth more than $2,000 to pay workers a so-called ‘prevailing wage,’” Sen. Lee said.

“However, the ‘prevailing wage’ is determined not by market forces operating in reality, but by federal bureaucrats operating in Washington, DC. As a result, federal contractors are charged, on average, a 22 percent premium on their labor costs above what private companies pay for the same project. Repealing the outdated, costly Davis-Bacon Act will give federal contractors the ability to hire more workers of all skill level, while lowering the overall costs of federal transportation construction projects.”

Rep. Steve King (R-IA), who introduced a companion bill in the House, added: “No one can claim to be a fiscal conservative if they think the federal government needs to inflate the cost of wages. I first dealt with Davis-Bacon wage scales when I started my construction company in 1975. The federal government dictated wage scale to all of my employees on federally funded projects. Micromanaging and disrupting the efficiencies in our businesses has ultimately resulted in an average of 20% higher costs to taxpayers. Simply put, we are bleeding red ink in the federal government. Rather than increasing costs by billions of dollars and restricting our free market, all that should be required is for the employer and the employee to agree on salary and benefits."